Aishwarya Rai Win 4 Crore Tax Case: Bollywood star Aishwarya Rai Bachchan has reportedly won a ₹4 crore dispute before the Income Tax Appellate Tribunal (ITAT) Mumbai, a major victory over the Income-Tax Department.

According to media reports, the actor prevailed in her appeal at ITAT Mumbai, which determined that the tax authorities had not given sufficient justifications for rejecting the initial estimate and had not appropriately taken the case’s facts into account.

How did Aishwarya Rai win 4 Crore Tax Case?

The I-T Department challenged the actor’s income tax computation for AY22-23 (FY23-24), according to media sources. What we know is as follows:

– As per the media reports, Aishwarya Rai Bachchan reported a total income of ₹39.33 crore for AY23 on October 22, 2022, including investments that produced ₹2.14 crore in exempt income.

– In her files, she also disclosed a voluntary disallowance of ₹49.08 lakh, stating that no direct expenses were incurred to achieve the exempt income under Section 14A.

– But the I-T Department handed her a notice of comprehensive scrutiny, according to which it verifies ITR filings in-depth.

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– She reportedly replied to the tax notice, but the tax assessing officer (AO) read Section 14A with Rule 8D and disregarded her explanations. A disallowance of ₹4.60 crore was computed, raising her assessed income for the fiscal year to ₹43.44 crore.

– The tax department took the case to ITAT after it was sent to the Commissioner of Income Tax (Appeals) [CIT(A)], which granted the actor relief.

What is Section 14A of the Income Tax Act?

The Income Tax Act of 1961’s Section 14A is a legal provision that lays down the law in relation to expenses incurred by a taxpayer to earn an income that does not form a part of total income as per the provisions under the Act.” Apart from that, in some situations, the specific amount might not be deductible from the taxpayer’s gross income.

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